New World Order baby.


Brics nations threaten IMF funding

By James Fontanella-Khan in New Delhi

[img]http://im.media.ft.com/content/images/02799a2a-66b3-11e0-8d88-00144feab49a.img[/img]



Brics nations threaten IMF funding

By James Fontanella-Khan in New Delhi..




Leaders of the world’s most powerful emerging economies have threatened to withhold additional financing requested by the International Monetary Fund to fight the European sovereign debt crisis unless they gain greater voting power at the Fund.

Meeting in India on Thursday, the heads of state from Brazil, Russia, India, China and South Africa expressed frustration at the slow pace of reform at the Washington-based multilateral lender, historically dominated by Europe and the US.


In a joint statement, the so-called Brics nations said there was an urgent need to “better reflect economic weights” and “enhance the voice and representation of emerging market and developing countries” at the IMF.

“We stress that the ongoing effort to increase the lending capacity of the IMF will only be successful if there is confidence that the entire membership of the institution is truly committed to implement the 2010 reform faithfully,” the said. The Fund’s shareholders agreed in 2010 to shift more of its voting weight towards emerging markets nations, but the US has not passed enabling legislation.

The leaders also criticised western countries for their poor handling of the global economy in the aftermath of the financial crisis.


Dilma Rousseff, Brazil’s president, accused western countries of causing a “monetary tsunami” by adopting aggressive expansionist policies such as low interest rates, which are making emerging economies less competitive globally.

“This crisis started in the developed world,” Ms Rousseff said. “It will not be overcome simply through measures of austerity, fiscal consolidations and depreciation of [labour costs], let alone through quantitative easing policies that have triggered what can only be described as a monetary tsunami, have led to a currency war and have introduced new and perverse forms of protectionism in the world.”

Despite uniting over reform of the IMF, the Brics failed to coalesce around one of the two non-US candidates seeking the presidency of its sister organisation, the World Bank. Ngozi Okonjo-Iweala, the Nigerian finance minister, and José Antonio Ocampo, the former Colombian finance minister, are both vying for the job, which traditionally goes to an American.

Barack Obama, US president, has nominated Jim Yong Kim, the president of Dartmouth College and a former head of the HIV/Aids programme at the World Health Organisation.

Speaking to the Financial Times, Mr Ocampo said Mr Kim lacked the appropriate experience for the job. He also said he would be open to discussions with Ms Okonjo-Iweala on whether one of them should pull out of the race at some point so that the developing world can back a single candidate.

“I think in terms of development expertise it is quite clear to everyone that the finance minister of Nigeria and myself stand above the US candidate, who has very narrow expertise in development,” Mr Ocampo said. “He is an excellent physician, nobody denies that, but we’re talking about a development institution.”

Separately, the Brics, which represent about 45 per cent of the world’s population and a quarter of the global economy at $13.5tn, set up a finance minister-led working group to consider formally creating a common Development Bank for the grouping.

This is the first step towards an emerging market bank and comes as the five countries have demanded greater financing support from the World Bank for infrastructure development.

Robert Zoellick, the outgoing president of the World Bank, told Reuters that a Brics-backed bank would have a hard time getting off the ground and would struggle to match the World Bank’s expertise. <---f.uck him

The criticisms by the Brics reflected their growing confidence as well as frustrations about the skewed governance structure of multilateral organisations. Eswar Prasad of the Brookings Institution, a former senior IMF official, said the emerging nations see the IMF, the World Bank and other organisations as being unfairly stacked in favour of advanced economies.

“They see the policies of advanced economies and the present structure of the international monetary system as significant threats to their own economic stability,” he said.

Additional reporting by Robin Harding in Washington

Can the Brics create a new world order?

Brazil, Russia, India, China and South Africa seek a multipolar world – but some argue they're bound by anti-Americanism


Simon Tisdall
guardian.co.uk, Thursday 29 March 2012 10.29 EDT

Today's one-day annual summit of the so-called Brics countries – Brazil, Russia, India, China and South Africa – has received scant attention in the west. That may be because the grouping has achieved little in concrete terms since its inception in 2009. Critics deride it as a photo-op and talking shop.

But this neglect, or disdain, may also reflect the fact that the Brics, representing almost half the world's population and about one-fifth of global economic output, pose an unwelcome challenge to the established world order as defined by the US-dominated UN security council, the IMF and the World Bank. The truth of the matter probably lies somewhere in-between. The five national leaders – presidents Dilma Rousseff of Brazil, Dmitri Medvedev of Russia, Hu Jintao of China and Jacob Zuma of South Africa and their host in Delhi, India's prime minister Manmohan Singh – are not noted for iconoclastic radicalism.

Rousseff has been the most outspoken, insisting that developing countries must be protected from the global "tsunami" of cheap money, unleashed by the US and the EU in the wake of the financial crisis, that was rendering their exports less competitive. "We will defend our industry and prevent the methods developed countries use to escape from crisis resulting in the cannibalisation of emerging markets," she said this month.

Brics boosters project a grandiose vision. India's commerce secretary, Anand Sharma, said this week the group sought nothing less than "to create a new global architecture". But commentators interpret such ambitions as essentially anti-American hot air. Pointing to a signal lack of substantive policy agreements, they suggest a desire to counter Washington's global dominance is the Brics' sole unifying objective.

"There are calls to establish a permanent secretariat and even a development bank in an effort to bolster the grouping's political impact," wrote Walter Ladwig of the Royal United Services Institute. "But this focus on institution-building is misplaced. It is the fundamental incompatibility of the Brics nations, not their lack of organisation, which prevents [them] acting as a meaningful force on the world stage". Ladwig continued: "Beyond the issues of economic governance, in many key areas the Brics nations are actually in strategic competition. Within Asia, India and Russia are potential obstacles to China's presumed regional dominance. At the international level, Russia, Brazil and India desire the emergence of a multipolar international system in which they are major actors, with the latter two seeking membership in an expanded UN security council.

"In contrast, China aims for a bipolar world in which it serves as the counterbalance to American power." So far, Beijing has opposed India's bid for a permanent security council seat.

A joint declaration issued at the close of the summit found common ground in strongly criticising western economic policy. "It is critical for advanced economies to adopt responsible macroeconomic and financial policies, avoid creating excessive global liquidity and undertake structural reforms to lift growth that create jobs," it said. There was agreement, too, to press ahead with plans to create a "south-south" development fund that might one day rival the World Bank and the Asian Development Bank.

The Brics renewed their demand for expanded voting rights for developing countries in the IMF and challenged western policy on Iran, stressing that military action to curb Tehran's suspect nuclear activities was unacceptable and suggesting the group was not bound by a looming ban on Iran's oil exports. Both the Iran and Syria crises must be resolved diplomatically, it said.

"We must avoid political disruptions that create volatilities in global energy markets and affect trade flow... We must ensure policy coordination to revive economic growth," the Indian leader, Manmohan Singh said. Brics countries would increase co-operation on terrorism and piracy, he added. On UN security council reform, he appealed for the group to speak with one voice.

The Brics countries' ambition to change the world in their image raises questions of fundamental values as well as geopolitical influence. Key members China and Russia have a tenuous attachment, or none at all, to democratic principles such as free elections, free speech and free media. India, too, faces rising criticism about perceived attempts to muzzle open debate. Tibetan activists said about 250 people were jailed this week in an Indian government drive to pre-empt anti-China demonstrations. The approach to basic human rights taken by China and Russia, most recently in relation to the Syrian uprising, is not a paradigm that developing countries might happily adopt.

In similar vein, less powerful non-aligned states are wondering whether the rise of the Brics merely marks the emergence of another selfish global elite, which will pay no more attention to their interests than do the western powers. Sreeram Chaulia, an international affairs analyst in India, told the New York Times that many smaller, poorer developing countries, especially in Africa, were watching to see if the five nations can evolve into true advocates for non-western interests. Developing countries wanted a multipolar world, rather than one dominated by the United States "or, for that matter, by China," he said.

In order to create a new world order, the bric will have to admit other fast growing economies like Nigeria.

afam4eva: In order to create a new world order, the bric will have to admit other fast growing economies like Nigeria.

you got to be kidding ,Nigeria ke

I think what those from developing countries should ask is do we need what the BRIC is offering?

a) Nigeria, and many other developing nations out there are not in anyway making this decision with BRIC.

b) The plans, if put together by the 5 member nations, will favour these 5 nations, and not all of the developing world.

Are we ready to be slave to a new deal of this sort at this time? With Russia, and China in this group, what good can come out of it for other developing Nations? I can't help but shake the feeling that the BRIC plan is Russia, and also China's way of creating for themselves(probably without the knowledge of the other) more control over world matters than they currently have.

aguiyi:

you got to be kidding ,Nigeria ke

I mean countries like Nigeria and not necessarily Nigeria. I mean countries with a large and diverse economy.

The problem is that Obama was not smart enough to have adopted Okonjo Iweala as their Candidate all this would have fizzled out

kettykin: The problem is that Obama was not smart enough to have adopted Okonjo Iweala as their Candidate all this would have fizzled out

That is not true and has no bearing to this in anyway. Nigeria is not a member of Brics, and if Brics wanted a candidate, OCampo, who is a Brazilian would make sense since Brazil is a member Nation.

Also this plan has been in the works long before you tuned into the World Bank story. The Brics plan essentially is trying to create for the nations their own IMF, not world bank. Let's quit trying to connect the disconnected.

Brics seek greater power in IMF in return for extra funds

http://www.irishtimes.com/newspaper/finance/2012/0330/1224314097950.html


[size=13pt]LEADERS OF the world’s most powerful emerging economies have threatened to withhold additional financing requested by the International Monetary Fund to fight the European sovereign debt crisis unless they gain greater voting power at the fund.

Meeting in India yesterday, the heads of state from Brazil, Russia, India, China and South Africa expressed their frustration at the slow pace of reform at the Washington-based multilateral lender, historically dominated by Europe and the US.

In a joint statement, the so- called Brics nations said that there was an urgent need to “better reflect economic weights” and to “enhance the voice and representation of emerging market and developing countries” at the IMF.[/size]

Robbing Peter to pay Paul cannot continue for Europeans nations anymore.

Kobojunkie:

That is not true and has no bearing to this in anyway. Nigeria is not a member of Brics, and if Brics wanted a candidate, OCampo, who is a Brazilian would make sense since Brazil is a member Nation.

Also this plan has been in the works long before you tuned into the World Bank story. The Brics plan essentially is trying to create for the nations their own IMF, not world bank. Let's quit trying to connect the disconnected.

Ocampo is actually Colombian but was nominated by Brazil just as Iweala was nominated by SA. IMO China, India and Russia would rather favour a Nigerian than a Colombian considering what they stand to gain from Nigeria. Brazil is only playin big brother by nominating Ocampo and remain the only stumbling block to NOI among the BRIC nations esp when u realize that Ocampo doesnt have his own country's support.

wesley80:

[b]Ocampo is actually Colombian but was nominated by Brazil [/b]just as Iweala was nominated by SA. IMO China, India and Russia would rather favour a Nigerian than a Colombian considering what they stand to gain from Nigeria. Brazil is only playin big brother by nominating Ocampo and remain the only stumbling block to NOI among the BRIC nations esp when u realize that Ocampo doesnt have his own country's support.

My mistake!

But I doubt China and Russia care for a Nigeria over a colombian as you claim. So far, both nations(China and Russia) have stayed away from getting involved with any side. They seem more interested in finding power for themselves, and this BRICS story reveals what a lot of people have been talking about for a while now.

On South Africa, we are yet to see the dividends of it's membership(apart from it's induction into a global club)in BRICS. In my opinion, it seems South Africa stands to gain more from it's IBSA membership than it's BRICS membership. But I guess there is still time to see what it stands to gain considering it is, in some way, the weakest of the 5 current BRICS member nations.

There is absolutely no doubt in my mind that nigeria should be a member of brics, in the near future, i forsee that it would be brincs, the n= nigeria. With a population of 168 million, a growth rate of 7% yearly, the largest middle class in africa at 45 million, more than 95% of the population in s.a, the 2nd most developed financial service sector, only behind south africa, largest exporter of crude to the u.s, with a daily out-put of 2.6 million barrels a day worth over 40 billion usd a year, with other sector's, agriculture, telecoms and the informal sector accounting for an additional 350 billion usd etc, etc it is only a matter of time and steady power, so that sme's can grow..... Power, nt even insecurity remain's our greatest obstacle india and russia face similar terrorism challenges as nigeria, while brazil and south africa also have serious insecurity issues. Drugs and other related crimes.

Henry120: There is absolutely no doubt in my mind that nigeria should be a member of brics, in the near future, i forsee that it would be brincs, the n= nigeria. With a population of 168 million, a growth rate of 7% yearly, the largest middle class in africa at 45 million, more than 95% of the population in s.a, the 2nd most developed financial service sector, only behind south africa, largest exporter of crude to the u.s, with a daily out-put of 2.6 million barrels a day worth over 40 billion usd a year, with other sector's, agriculture, telecoms and the informal sector accounting for an additional 350 billion usd etc, etc it is only a matter of time and steady power, so that sme's can grow..... Power, nt even insecurity remain's our greatest obstacle india and russia face similar terrorism challenges as nigeria, while brazil and south africa also have serious insecurity issues. Drugs and other related crimes.

Solve your Power issue and tame your corruption issues and we (BRICS) can start considering your inclusion.

Henry120: There is absolutely no doubt in my mind that nigeria should be a member of brics, in the near future, i forsee that it would be brincs, the n= nigeria. With a population of 168 million, a growth rate of 7% yearly, the largest middle class in africa at 45 million, more than 95% of the population in s.a, the 2nd most developed financial service sector, only behind south africa, largest exporter of crude to the u.s, with a daily out-put of 2.6 million barrels a day worth over 40 billion usd a year, with other sector's, agriculture, telecoms and the informal sector accounting for an additional 350 billion usd etc, etc it is only a matter of time and steady power, so that sme's can grow..... Power, nt even insecurity remain's our greatest obstacle india and russia face similar terrorism challenges as nigeria, while brazil and south africa also have serious insecurity issues. Drugs and other related crimes.

Solve your Power issue and tame your corruption issues and we (BRICS) can start considering your inclusion.

Cut off the core North and Nigeria statistics will change completely and would probably be good enough to attract attention.

Of the BRICS, only China is big enough economically to really have a voice in the IMF.

The others are small fries.

Even India...how much money do they contribute to the IMF anyways?

@ okponwa, what are you? Brics, spokesman? We should be a member of brics.

Henry120: @ okponwa, what are you? Brics, spokesman? We should be a member of brics.

Because??

Russia might leave BRICS because it isn't a fast growing economy anymore. But there are other countries who might join BRICS like Indonesia, Vietnam, Turkey, Mexico, and Nigeria. So us Nigerians will have compettition. But with constant power then Nigeria can grow over 11% a year because less money on generators means more money spending and investing for consumers and producers. This will also attract foreign investment for much needed sectors of investment like agriculture and manufacturing. With power comes more processing plants so Nigeria can make finished food and goods. Then we can start to export. Our textiles industry can be revitalized.

All we need is energy. How will we get it though? Coal, Nuclear, hydro power, solar?

Russia will not leav. It economy is still ok and it has a lot of global influence.

igbo2011: Russia might leave BRICS because it isn't a fast growing economy anymore. But there are other countries who might join BRICS like Indonesia, Vietnam, Turkey, Mexico, and Nigeria. So us Nigerians will have compettition. But with constant power then Nigeria can grow over 11% a year because less money on generators means more money spending and investing for consumers and producers. This will also attract foreign investment for much needed sectors of investment like agriculture and manufacturing. With power comes more processing plants so Nigeria can make finished food and goods. Then we can start to export. Our textiles industry can be revitalized.

All we need is energy. How will we get it though? Coal, Nuclear, hydro power, solar?

Nigeria is not joining BRICs any time soon. They have the potential but not in the near forseeable future. South Africa on the other hand will not likely gain any steam as its economy is not growing at a fast enough predicted pace. The other members want to use her as a an entry point into much of Africa.

I see SA playing a very minute role and turkey possibly joining the clan.

SA joined BRICS to give BRIC a stable point to influence. Africa and South Africa has a strong and stable economy that is growing fast than we predicted not slower.